Brazil Senate committee passes telecoms modernization bill

Reuters Staff

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BRASILIA, Sept 11 (Reuters) - The Brazilian Senate's Science and Technology Committee on Wednesday approved a bill that will modernize Brazil's telecommunications law and boost companies in the sector by lifting restrictions on asset sales.

The full Senate could vote on the bill, known as PLC 79, later on Wednesday.

The law aims to encourage investment in broadband in remote areas of Brazil by allowing companies to own outright telecom assets, such as cellphone towers and valuable real estate, that they may sell if they so choose.

Credit ratings agency Moody's Investors Service last week said passage of PLC 79 would be credit positive for the entire Brazilian telecommunications industry but especially for Oi SA , which is in bankruptcy protection.

The new law could facilitate the sale of Oi by making the company more attractive.

Under the current more restricted model, assets such as concessions revert to the government once a service provider's contract period expires. It also requires providers to invest in outdated technology, such as public phones and landlines.

The law could unleash a wave of asset sales, Moody's said, citing the regulator's estimate of $5 billion in reversible assets currently held by major carriers.

The bill could also benefit Telefonica Brasil SA, Claro, the local subsidiary of Mexico's America Movil SAB de CV and TIM Participações SA, a subsidiary of Telecom Italia SpA. (Reporting by Anthony Boadle; Editing by Steve Orlofsky)